Tissue Papers segment delivers strongest performance since 2020
KINGSEY FALLS, QC, Aug. 3, 2023 - Cascades Inc. (TSX: CAS) reports its unaudited financial results for the three-month period ended June 30, 2023.
Q2 2023 Highlights
- Sales of $1,168 million (compared with $1,134 million in Q1 2023 and $1,119 million in Q2 2022);
- Operating income of $64 million (compared with an operating loss of $(80) million in Q1 2023 and operating income of $32 million in Q2 2022);
- Net earnings per common share of $0.22 (compared with a net loss per common share of ($0.75) in Q1 2023 and net earnings per common share of $0.10 in Q2 2022);
- Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA (A)1) of $141 million (compared with $134 million in Q1 2023 and $91 million in Q2 2022);
- Adjusted net earnings per common share1 of $0.27 (compared with adjusted net earnings per common share1 of $0.32 in Q1 2023 and adjusted net earnings per common share1 of $0.10 in Q2 2022);
- Net debt1 of $2,076 million as of June 30, 2023 (compared with $2,070 million as of March 31, 2023). Net debt to EBITDA (A) ratio1 of 4.1x, down from 4.6x as of March 31, 2023;
- Total capital expenditures, net of disposals, of $104 million in Q2 2023, compared to $137 million in Q1 2023 and to $116 million in Q2 2022. The Corporation's 2023 forecasted net capital expenditures of approximately $325 million is unchanged.
Mario Plourde, President and CEO, commented: "We had a solid second quarter, with consolidated sales and EBITDA (A)1 levels increasing 4% and 55%, respectively, year-over-year. Results were driven by the Tissue Papers segment, which had its strongest performance since Q2 2020, reflecting benefits from commercial and operational initiatives. The repositioning of our Tissue Papers platform announced at the end of April 2023 progressed as planned in the second quarter, with the closures completed as scheduled in June and July. We anticipate that these decisions, combined with the ongoing productivity optimization initiatives, which are also progressing as expected, will continue to strengthen the performance of our Tissue Papers business going forward. Slightly softer results in the Containerboard segment largely reflect lower index-linked selling prices, the effects of which more than offset the beneficial effect of lower raw material costs. As expected, Containerboard results include costs related to Bear Island as the facility continues to be ramped up. Lastly, results in the Specialty Packaging business decreased slightly year-over-year, as softer volumes and higher production costs more than offset higher selling prices."
Discussing near-term outlook, Mr. Plourde commented, "On a consolidated basis, we are expecting a stable operational performance sequentially in the third quarter, with the Containerboard and Specialty Packaging businesses generating stable results and the Tissue Papers segment delivering a slightly stronger performance. Additionally, we anticipate continued progress in the ramp up of the Bear Island Mill. More broadly, while we are remaining prudent on the demand-side, raw material pricing for our Tissue business and lower transportation costs for all of our businesses are expected to be tailwinds in the third quarter. Production cost levels are expected to be stable sequentially while continuing to be more elevated than last year. Lastly, we anticipate that our leverage ratio will continue to improve in the coming quarters.
We will be hosting a Bear Island Mill tour and institutional investor day in Virginia on September 14, 2023, and look forward to showcasing this modernized recycled containerboard facility and elaborating on our businesses and strategies to the financial community."
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